HISTORY OF TRADE  

To the 1st century BC

To the 15th century AD
16th - 18th century
     Portugal's eastern trade
     Rivals in the overseas trade
     Trade winds
     Spanish silver
     The Atlantic cod trade
     Dutch trade in the east
     English trade in the east
     The triangular trade
To be completed

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Portugal's eastern trade: AD 1508-1595

The profitable trade in eastern spices is cornered by the

Portuguese in the 16th century to the detriment of Venice,
which has previously had a virtual monopoly of these
valuable commodities - until now brought overland through
India and Arabia, and then across the Mediterranean by the
Venetians for distribution in western Europe.
 
By establishing the sea route round the Cape, Portugal can
undercut the Venetian trade with its profusion of
middlemen. The new route is firmly secured for Portugal
by the activities of Afonso de Albuquerque, who takes up
his duties as the Portuguese viceroy of India in 1508.
The early explorers up the east Africa coast have left  
Portugal with bases in Mozambique and Zanzibar.
Albuquerque extends this secure route eastwards by
capturing and fortifying Hormuz at the mouth of the
Persian Gulf in 1514, Goa on the west coast of India in
1510 (where he massacres the entire Muslim population for
the effrontery of resisting him) and Malacca, guarding the
narrowest channel of the route east, in 1511.
The island of Bombay is ceded to the Portuguese in 1534.
An early Portuguese presence in Sri Lanka is steadily
increased during the century. And in 1557 Portuguese
merchants establish a colony on the island of Macao. Goa
functions from the start as the capital of Portuguese India.
Rivals in the overseas trade: AD 1555-1595

With this chain of fortified ports of call, and with no

vessels in the Indian Ocean capable of challenging her
power at sea, Portugal has a monopoly of the eastern spice
trade.

Indeed the English, now developing interests of their own  

in ocean commerce, consider that their only hope of trade
with the far east is to find a route north of Russia. One of
the first joint-stock enterprises, the Muscovy Company
chartered in 1555, results from early efforts to find a
northeast passage.
Of the other Atlantic maritime powers, Spain is mainly
occupied with its American responsibilities. And the Dutch
enjoy a direct benefit from Portugal's trade. Their ships
have a monopoly in ferrying the precious eastern cargoes
 
from Lisbon to northern Europe.

The situation changes suddenly in 1580, when the Spanish

(perennial enemies of the Dutch) occupy Portugal.
The Spanish leave control of the Portuguese empire to
Lisbon, but the political change in itself does damage to
Portugal's trading interests. Deprived now of their share of
the eastern trade, the Dutch resolve to build up a commerce
of their own. Like the English, their first instinct is to look
for a northeast passage (a task which takes Willem Barents
into uncharted waters). But in 1595 they decide that their  
best course of action is to challenge the Portuguese on the
southern route.

It is a decision which will lead to major changes in the

eastern trade. But in the short term, the greater volume of
trade is now being carried out by Spain across the Atlantic.
Trade winds: from the 16th century AD

The development of ocean travel in the 16th century brings  

with it an increasing knowledge of wind patterns. The
phrase 'trade wind' is ancient. Deriving from an old use of
'trade' to mean a fixed track, it is applied to any wind which
follows a predictable course. Since such winds can be of
great value to merchant ships making long ocean voyages,
the term becomes understood in the 18th century to mean
winds which favour trade.

The best known trade winds are those in the Atlantic which
blow from the northeast in the northern hemisphere and
from the southeast south of the equator. This predictable
pattern explains why ships sailing between Europe and the
Cape take a wide curving course through the Atlantic.

Even more useful as trade winds are the monsoons which

blow in the Indian Ocean. Their particular benefit to long-
distance merchantmen is a change of direction at different
seasons of the year. The northeast monsoon blows from
October to March and the southwest monsoon from April to
 
September.

East Indiamen therefore schedule their journeys to arrive at

their eastern destination before the spring, and to depart for
Europe again during the summer.
Spanish silver: 16th century AD

The wealth of Spain's new colonies in Latin America

derives mainly from silver. In 1545 a prodigious source of
the metal is discovered at Potosí, in modern Bolivia. This
region, high in the Andes, is so rich in both silver and tin
that it eventually has as many as 5000 working mines.
 
In 1546, a year after the discovery at Potosí, silver is found
at Zacatecas in Mexico. Other major new sources of the
metal are found in Mexico in the next few years. At the
same time sources of gold are being tapped, though in
much less quantity.
Convoys of Spanish caravels, after delivering to Portobelo  
the European goods needed in the colonies, carry back to
Spain the precious bullion with which the colonists pay for
it - together with the 20% of all gold and silver due to the
Spanish crown.

These treasures attract privateers from northern Europe -

meaning privately owned vessels operating, even if
informally, on behalf of a government. Their captains are
drawn to the Spanish Main (the mainland of Spanish
America, where the ships dock) like wasps to a honey pot.
Sailors from England, such as Francis Drake, prey on the
Spanish fleets in what is effectively a programme of
national piracy.
At the Spanish end, all trade has to be channelled through
the official Casa de Contratación (House of Trade)
established in Seville in 1503. This monopoly brings great
wealth to Seville, and an increase in prosperity from this
flow of bullion spreads outwards through Europe. The
region of Seville, and indeed the whole of Spain, cannot
provide all the goods required by the colonists. Raw  
materials and manufactured goods from far flung regions
make their way to Seville for transport to America.

Europe in the 16th century is already experiencing, for

other reasons, an inflationary pressure. The Spanish bullion
has an added effect in pushing prices up.
The Atlantic cod trade: AD 1497-1583

The voyage of John Cabot in 1497 directs European

attention to the rich stocks of fish in the waters around
Newfoundland. Soon fishing fleets from the Atlantic
nations of Europe are making annual visits to catch cod.
They bring with them large supplies of salt. Summer
settlements are established, on the coasts of Newfoundland,
to process the fish before it is transported back to European
 
markets in the autumn.

England plays a leading role in the trade, and in 1583

Humphrey Gilbert formally annexes Newfoundland on
behalf of the English queen. It is a claim which does not go
undisputed - particularly by France, whose fleets are the
main rivals of the English in these waters.
Dutch trade in the east: AD 1595-1651

The first Dutch expedition round the Cape to the far east, in  
1595, is captained by Jan Huyghen van Linschoten, a
Netherlands merchant whose only knowledge of the orient
comes from trading in Lisbon. The survivors of this journey
get back to Holland two years later. The have established a
trading tre y bring valuable cargo. And they aty with the
sultan of Bantam, in Java.

Their return prompts great excitement. Soon about ten

private vessels are setting off each year from the
Netherlands to find their fortune in the east. The States
General of the newly independent Dutch republic decide
that this unlicensed trading activity, in distant and
dangerous waters, needs both control and protection.
In 1602 the States General form a Dutch East India
Company, with extensive privileges and powers. It is to
have a tax-free monopoly of the eastern trade for twenty-
one years. It is authorized to build forts, establish colonies,
mint coins, and maintain a navy and army as required.

With these powers the company takes only a few decades

 
to deprive Portugal of the spice trade. A capital is
established at Batavia, in Java, in 1619. The Portuguese are
driven out of Malacca by 1641 and from Sri Lanka by
1658. But the main focus of Dutch attention is the
Moluccas - the Indonesian islands of which the alternative
name, the Spice Islands, declares their central importance
in the eastern trade.
The Moluccas are the source of the most valuable spice of
all, the clove, coveted for many different purposes - as a
flavour in food, as a preservative, as a mild anaesthetic, as
an ingredient in perfume, even to mask stinking breath. In
pursuit of Moluccan cloves, and also nutmegs, the
Portuguese make local treaties as early as 1512.
 
In the early decades of the 17th century the Dutch East
India Company gradually excludes the Portuguese from
trade in the Moluccas. The Dutch also take on, and oust
from the islands, another European nation attempting to get
a foothold in the region - the English East India Company.
The Dutch control the trade in cloves with ruthless
efficiency. During the 17th century clove trees are
eradicated on all the Spice Islands except two - Amboina
and Ternate - to limit production and keep prices high.
Strict measures are taken to ensure that plants are not
exported for propagation elsewhere (a restriction
 
successfully maintained until the late 18th century).

The Portuguese never recover their trading strength in the

east. But in expelling the English from the Moluccas, the
Dutch unwittingly do them a favour. The English East India
Company decides to concentrate its efforts on India.
English trade in the east: 17th century AD

On the last day of the year 1600 Elizabeth I grants a charter  

to a 'Company of Merchants trading into the East Indies'.
Early voyages prove successful; by 1614 the East India
Company owns twenty-four ships. But competition with the
Dutch in the spice islands leads to violence, culminating in
a massacre of English merchants at Amboina by their
Dutch rivals in 1623.

This disaster causes the company to concentrate on its

interests in India. In 1613 a factory (meaning a secure
warehouse for the accumulation of Indian textiles, spices
and indigo) has been formally established on the west
coast, at Surat. The first English vessel with a cargo of
these Indian goods sails from Surat in 1615.
Surat remains the English headquarters on the west coast
until it is gradually replaced, between 1672 and 1687, by
Bombay (given to Charles II in 1661 as part of the dowry
of his Portuguese bride, Catherine of Braganza, and leased
by him to the company in 1668).

Meanwhile the English are establishing secure footholds on  

the east coast. Fort St George is begun at Madras in 1640
and is completed in 1644. Calcutta is eventually selected, in
1690, as the best site for a trading station in the Ganges
delta; it is fortified, as Fort William, in 1696. By the end of
the 17th century the three English presidencies of Bombay,
Madras and Calcutta are securely established.
Triangular trade: 18th century AD

The triangular trade has an economic elegance most

attractive to the owners of the slave ships. Each of the three
separate journeys making up an expedition is profitable in
its own right, with only the 'middle voyage' across the
Atlantic involving slaves as cargo.

Ships depart from Liverpool or Bristol with items in  

demand in west Africa - these include firearms, alcohol
(particularly rum), cotton goods, metal trinkets and beads.
The goods are eagerly awaited by traders in ports around
the Gulf of Guinea. These traders have slaves on offer,
captured in the African interior and now awaiting transport
to America.
With the first exchange of merchandise completed, the  
slaves are packed into the vessels in appalling conditions
for the Atlantic crossing. They are crammed below decks,
shackled, badly fed and terrified. It is estimated that as
many as twelve million Africans are embarked on this
journey during the course of the Atlantic slave trade, and
that one in six dies before reaching the West Indies - where
the main slave markets on the American side of the ocean
are located.

The most valuable product of the West Indies, molasses

extracted from sugar cane, is purchased for the last leg of
the triangle. Back in England the molasses can be
transformed into rum. And so it goes on.